UPDATED: David Moyes was sacked as Manchester United manager on Tuesday after the club’s owners, the Glazer family, decided to end the Scot’s disastrous tenure at Old Trafford.

Ryan Giggs, with Nicky Butt as his assistant, will take charge until the end of the season. Giggs has served as player-coach under Moyes while Butt has worked with the reserves.

The Glazers handed executive vice-chairman Ed Woodward the mandate to dismiss Moyes less than 12 months into his £4million-a-year, six-year contract after United’s defeat at Everton on Sunday confirmed their failure to qualify for next season’s Champions League.

"The Club would like to place on record its thanks for the hard work, honesty and integrity he brought to the role."

Moyes is likely to receive compensation of one year’s salary rather than the remaining five years of his deal, with key performance targets having been missed in United’s worst ­campaign for almost a quarter of a century. He will be forced to endure the humiliation of reporting for training before the formalities of his departure are completed.

The backroom staff he appointed in place of Sir Alex Ferguson’s coaches Mike Phelan and Rene Meulensteen are also likely to be moved on, with Steve Round, Jimmy Lumsden and Phil Neville having struggled to earn the players’ respect. The future of Chris Woods, who has overseen a marked improvement in the form of David de Gea as goalkeeping coach, is uncertain.

United have yet to actively pursue a replacement for Moyes, with the Glazers remaining supportive of the former Everton manager until the weekend. Borussia Dortmund coach Jürgen Klopp has admirers at Old Trafford after building a young, vibrant and successful team in Germany, and the 46-year-old is expected to be favoured ahead of candidates such as Louis van Gaal and Diego Simeone. Giggs’s lack of experience is likely to count against him securing the job in the long term.

Carlo Ancelotti, currently in charge of Real Madrid, could be in the frame as he has failed to to settle at the Bernabéu following his move from Paris St-Germain last summer.

The Glazers regard the likelihood of a seventh-place finish as substantially below expectations, despite the acceptance that Ferguson’s departure would lead to turbulence this campaign. The owners thus do not wish to entrust Moyes with the £150million transfer funds available in the summer.

With United needing to close a six-point gap on sixth-placed Tottenham to salvage potential Europa League qualification, the club is facing the ignominious prospect of failing to qualify for European football for the first time since 1982.

Senior United figures have also noted that United are poised to become the worst defending champions in Premier League history, equalling the seventh-place finish of Ray Harford’s Blackburn Rovers in 1996.

Concern has grown among the United hierarchy over the direction the team has taken under Moyes and several senior players’ disaffection has been transmitted to influential power-brokers at the club.

With season-ticket renewals due at Old Trafford for next season, and growing anger among supporters, the prospect of Moyes being retained has led to fears of a potential drop in ticket income at a time when the club cannot rely on Champions League prize money.

Moyes has been given several opportunities to arrest the team’s slump this season, with his position most under threat after the 3-0 defeat at home to Liverpool last month, but there is now a realisation that the manager has been a central factor in the downturn .

Ferguson’s support of Moyes, after recommending him for the job, is also understood to have been eroded by the poor performances and results, as well as by the breakdown of the manager’s relationship with the increasingly marginalised Giggs .

Moyes’s repeated complaints last summer about the difficulty of United’s start to the season, during which they faced Chelsea, Liverpool and Manchester City in the first month hinted at his discomfort in the role.

While he persuaded Wayne Rooney to commit his future to the club after the forward attempted to leave last summer, persistent rumours of discontent in the dressing-room failed to subside, with Robin van Persie, Giggs, Nemanja Vidic and Danny Welbeck all disenchanted with the new regime.

Moyes alarmed his bosses with his indecision during the summer ­transfer window, which resulted in a disastrous £27.5million purchase of Marouane Fellaini from Everton minutes before the deadline. Having failed to add sufficient reinforcements, Moyes then oversaw a poor start to the season from which the team have not recovered.

The Glazers sanctioned the £37.5million club-record signing of Juan Mata in January but United have lost 10 of their 22 games this year. Sunday’s defeat at Goodison Park was their 11th league reverse this season – a club record in the Premier League – and United are on course to record their lowest finish since 1990, when Ferguson’s team finished 13th.